He had two years and $42.7 million left on his contract with the Heat. Opting out does not, however, mean the four-time NBA MVP has decided to leave the Heat, an unnamed source told the Associated Press.

In his four seasons with the Heat, Miami has gone to the NBA Finals four times, winning two championships.

In this season's just-ended Finals, the team lost to the San Antonio Spurs in five games. After the series ended, James told reporters that he was planning to take a vacation and consider his options. He had a June 30 deadline.

News of James' decision comes a day after the New York Knicks' Carmelo Anthony revealed that he'd decided to terminate the final year of his contract. Anthony, who had a Monday deadline, also will be able to negotiate with teams starting on July 1.